MercoPress. South Atlantic News Agency
Uruguay has become one of the most expensive countries in the region
Montevideo is above average in seven of eleven items of a survey of eleven cities Uruguay has become one of the dearest countries in the region taking into account prices of goods and services according to a survey in eleven cities done by the Group of Newspapers from the Americas, (GDA) a network of the main dailies in the continent.
Based on a basket of eleven products and services (food, transport, housing, education and leisure), Montevideo figures above average in seven of those items, but this should not come as a surprise given that Uruguay has suffered double digit inflation.
Although in the last ten years inflation in Uruguay has been below two digits, the country figures only behind Venezuela and Argentina when it comes to consumer goods price hikes. Inflation this year is expected to reach 8.2% after having touched 8.75% in the last twelve months to July.
Likewise last year the government reached an agreement with the main supermarket chains to freeze for two months (November/December) a list of two hundred items (all of them included in the CPI calculi) so that inflation remained below two digits. Likewise with public utility rates, mainly energy and fuel were frozen for several months, at a huge cost for the Treasury to keep the overall annual index below the magic two digits, which if trespassed will immediately trigger a round of salaries discussions.
The Uruguayan government inflation target has been 4% to 6%, but given the poor performance in achieving it, the Central bank has opened the range from 3% to 7% for 2014, when the results of a new monetary policy are expected to begin functioning.
Furthermore with the government unable to control the budget deficit to a reasonable range (or a surplus for hard times), when the economy has been growing sustainedly for ten years, and with a massive influx of dollars attracted by the high rates of the Central bank financial instruments, Uruguay has seen its costs in Pesos converted into dollars balloon, losing competitiveness and export incentives.
With a government soft on unions and thus labour costs advancing faster than inflation which reflects in domestic prices, it has also mirrored in the minimum monthly wage. According to the survey of eleven cities, here also Uruguay is above average with 377 dollars compared to 351 dollars.
Last but not least, since Uruguay’s main trade partner is Brazil, the Uruguayan Peso is normally tied to the evolution tendency of the Real. The Brazilian currency in the last twelve months has gone from 2 to the dollar to 2.46 this week (almost 20% depreciation). The Uruguayan Peso on the other hand has remained relatively stable with a variation at the most of 10%.
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Read all commentsWhy can't Uruguay tame its inflation?
Aug 20th, 2013 - 03:45 am 0@1
Aug 20th, 2013 - 08:00 am 0Oh, come on!
You clearly have not been reading my posts if you don't know that.
Pepe is to western standards a Marxist commie and fervently believes in “social inclusion” BUT not the reasonable looking after the sick, invalided and mentally deranged only, but anyone without a job gets paid from the public purse.
What do you think happens to these uneducated “poor” people when they are paid NOT to work, the bastards DON’T work, ever.
One of the area managers for Movistar, a young lady who works really hard covering six outlets for her company speaks good English and whenever we meet we have a chat. She agrees with looking after those that need it but is livid at the numbers who receive “her” tax money when they are in perfect health. She voted for Pepe but now despises him for weakness towards Argentina and the unions.
Pepe also had a “good” idea to reduce unemployment: not the one we all wanted such as encouraging inward investment, oh no. He put the bastards on the public roll sweeping streets or lounging in the public offices, further degrading the “customer service” which is laughable in the whole of the country.
But I still love the country and the people, I just feel sorry for the hard working ones in the private sector having all the unnecessary fiscal drag they to have to pay for.
On top of extremely high prices the quality you get in Uruguay is poor. Be it materials for construction, or also services.
Aug 20th, 2013 - 08:36 am 0The mentality of the Uruguayan was well represented by a sign in a restaurant in la Barra saying: Abrimos cuando llegamos, ceramos cuando nos vamos (we open when we arrive, we close when we go). In other words: We don't care a shit about our clients! Good luck Uruguay, you need a deep crisis!
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